Trade Agency Decisions Expected to Face More Scrutiny After Recent Supreme Court Ruling

A recent Supreme Court case on courts' deference to federal agencies will likely result in tougher legal scrutiny of trade policies made by the Commerce Department, CBP and other agencies that affect trade, said Devin Sikes, a lawyer at Akin Gump. Sikes wrote that the U.S. Court of International Trade and federal appeals courts will be doing deeper reviews of federal agencies' trade regulations that could have ambiguity. "Federal agencies operating in the international trade arena likewise will need to more fully explain their reasons for interpreting a regulation in a particular way," Sikes wrote. "These agencies may no longer assert ambiguity based on the regulation’s terms and expect deference from the courts. Expect an increase in the number of challenges filed contesting an agency’s interpretation of its own regulations."

Sikes quoted Supreme Court Justice Elena Kagan from the Kisor v. Wilkie decision, in which the decision said that courts should not defer to an interpretation that the agency developed during litigation, or when there was not "fair warning" for that interpretation.